Sunday, May 23, 2021

Federal Reserve Chairman Powell in Unprecedented Video Issues Commentary on Digital Currencies

Jay Powell

The government appears to be getting ready to make a move in the digital currency arena.

For the first time ever, Federal Reserve chairman Jay Powell has issued a stand-alone video statement. The topic of the unprecedented video is digital currencies.

In the video, Powell comments on cryptocurrencies, stablecoins and central bank digital currencies.

Here are key snipetts:
The effective functioning of our economy requires that people have faith and confidence
not only in the dollar, but also in the payment networks, banks, and other payment service
providers that allow money to flow on a daily basis...

Recently, the rise of distributed ledger technology, which offers a new approach to
recording ownership of assets, has allowed for the creation of a range of new financial products and services—including cryptocurrencies. To date, cryptocurrencies have not served as a
convenient way to make payments, given, among other factors, their swings in value. 

Nonetheless, coins tied to the value of the dollar or another currency—known as “stablecoins”—have emerged as a new way to make payments. These stablecoins aim to use new technologies in a way that has the potential to enhance payments efficiency, speed up settlement flows, and reduce end-user costs—but they may also carry potential risks to those users and to the broader financial system...

echnological advances also offer new possibilities to central banks—including the Fed.
In particular, technology now enables the development and issuance of central bank digital
currencies, or CBDCs. A CBDC is a new type of central bank liability issued in digital
form. While various structures and technologies might be used, a CBDC could be designed for use by the general public.

For the past several years, the Federal Reserve has been exploring the potential benefits
and risks of CBDCs from a variety of angles, including through technological research and

To help stimulate broad conversation, the Federal Reserve Board will issue a discussion
paper this summer outlining our current thinking on digital payments, with a particular focus on the benefits and risks associated with CBDC in the U.S. context. As part of this process, we will ask for public comment on issues related to payments, financial inclusion, data privacy, and information security.
We are committed at the Federal Reserve to hearing a wide range of voices on this
important issue before making any decision on whether and how to move forward with a U.S. CBDC, taking account of the broader risks and opportunities it could offer. The paper represents the beginning of what will be a thoughtful and deliberative process. Irrespective of the conclusion we ultimately reach, we expect to play a leading role in developing international standards for CBDCs, engaging actively with central banks in other jurisdictions as well as regulators and supervisors here in the United States throughout that process.
The Federal Reserve remains committed to ensuring that the public has access to a safe,
reliable, and secure payments system. Our forthcoming paper on the evolution of digital
payments is intended—along with our other work as a supervisor, regulator, and payment system operator—to advance the objective of ensuring that the payments system and the economy work for all Americans. We look forward to hearing your thoughts on this important topic.

Bottom line: The Federal Reserve is making its first step to neuter the usefulness of private cryptocurrencies and introduce a central bank digital currency. 

There is just no way the Fed is going to allow any currency to emerge, digital or otherwise, that will take control of the money supply away from the hands of the Fed.

Powell's unprecedented video is evidence enough of this.

Below is the full Powell video5 minutes and 39 seconds).




  1. First they ignore you, then they laugh at you, then they fight you, then you win. This is the beginning of the “fight” stage.

  2. Bob-
    Will the introduction of a FED digital currency mean the end of cash? Is that part of the design here?

    1. Most people I read believe it is, as CBDC will likely have a negative interest rate to force people to spend it quickly. This would make cash under the mattress very desirable. So, they would need to ban cash.

    2. @John H

      That's going to be tricky considering they've flooded the country with third worlders who don't even have bank accounts, much less use cryptocurrencies. Also, how are you going to get everyone to use crypto when the government can't keep the electricity on in states like California and Texas?

    3. Key points both John and Paul and I think part of the overall control frenzy. Those that see the illegitimate fiat disaster still exploding are wondering where a move to independent money will take the liberty world.

  3. You forgot the confiscate part...

  4. Elon Musk, one of the largest beneficiaries of government contracts and subsidies, has done an excellent job of normalizing cryptocurrencies while trashing the reputation of individual crypto. What will be his next move, as encouraged (or even scripted) by his masters?